Ex 1.1
HEALTH AND RETIREMENT PROPERTIES TRUST
(a Maryland real estate investment trust)
PURCHASE AGREEMENT
------------------
July 2, 1997
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx, 00xx Xxxxx
World Financial Center
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Health and Retirement Properties Trust, a Maryland real estate investment
trust (the "Company"), confirms its agreement with you with respect to the sale
by the Company and the purchase by you of the aggregate principal amount of the
Company's Remarketed Reset Notes (the "Securities") set forth in Schedule I
hereto. The Securities are to be issued pursuant to the Indenture and
Supplemental Indenture referred to in Schedule I hereto (together, the
"Indenture"), between the Company and the Trustee identified in such Schedule
(the "Trustee").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-26887) for the
registration of debt securities, preferred shares of beneficial interest,
depositary shares, common shares of beneficial interest and warrants under the
Securities Act of 1933, as amended (the "1933 Act"), and has filed such
amendments thereto, if any, as may have been required to the date hereof. Such
registration statement has been declared effective under the 1933 Act and the
Indenture has been duly qualified under the Trust Indenture Act of 1939, as
amended (the "1939 Act"). Such registration statement (as amended, if
applicable) and the prospectus constituting a part thereof, as supplemented by
the prospectus supplement relating to the Securities (including, in each case,
all documents incorporated or deemed to be incorporated by reference therein),
as from time to time amended or supplemented pursuant to the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), or
otherwise, are hereinafter referred to as the "Registration Statement" and the
"Prospectus", respectively. All references in this Agreement to financial
statements and schedules and other information which is "contained", "included"
or "stated" in the Registration Statement or the Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement or in the
Prospectus, as the case may be.
Section 1. Representations and Warranties.
(a) The Company represents and warrants to you as of the date hereof as
follows:
(i) At the time the Registration Statement became effective, the
Registration Statement complied in all material respects with the
requirements of the 1933 Act and the rules and regulations under the 1933
Act (the "1933 Act Regulations") and did not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus, at the date hereof (unless the term "Prospectus" refers to a
prospectus which has been provided to you by the Company for use in
connection with the offering of the Securities which differs from the
Prospectus on file at the Commission at the date of effectiveness of the
Registration Statement, in which case at the time it is first provided to
you for such use) and at the Closing Time referred to in Section 2 hereof,
does not and will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties in
this subsection (i) shall not apply to (a) that part of the Registration
Statement that constitutes the Statement of Eligibility (Form T-1) of the
Trustee under the 1939 Act or (b) those parts of the Registration Statement
or the Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by you expressly for use in the
Registration Statement or the Prospectus.
(ii) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations"), and, when read
together with the other
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information in the Prospectus, at the time the Registration Statement
became effective and at Closing Time, did not and will not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(iii) The Company is a Maryland real estate investment trust duly
organized, validly existing and in good standing under the laws of the
State of Maryland. Each of its subsidiaries has been duly organized and is
validly existing as a corporation or trust in good standing under the laws
of its jurisdiction of incorporation or organization. Each of the Company
and its subsidiaries has full power and authority (corporate and other) to
carry on its business as described in the Registration Statement and in the
Prospectus and to own, lease and operate its properties. Each of the
Company and its subsidiaries is duly qualified and is in good standing as a
foreign corporation or trust, as the case may be, and is authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where
the failure to be so qualified would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(iv) The financial statements of the Company and its subsidiaries and,
to the Actual Knowledge of the Company (as defined in paragraph (xii) of
this Section 1(a)), of Marriott International, Inc. (the "Operator") and
Government Properties Investors, Inc. ("GPI") and its consolidated
subsidiaries, together with the related schedules and notes thereto,
included or incorporated by reference in the Registration Statement and in
the Prospectus, comply as to form in all material respects with the
requirements of the 1933 Act. Such financial statements of the Company and,
to the Actual Knowledge of the Company, of the Operator and GPI, together
with the related schedules and notes thereto, present fairly the
consolidated financial position, results of operations, shareholders'
equity and changes in financial position of the foregoing entities at the
respective dates or for the respective periods therein specified and have
been prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied throughout the periods involved. The pro
forma financial statements and other pro forma financial information
(including the notes thereto) included or incorporated by reference in the
Registration Statement and in the Prospectus (i) present fairly the
information shown therein, (ii) have been prepared in accordance with the
Commission's
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rules and guidelines with respect to pro forma financial statements and
(iii) have been properly compiled on the basis described therein and the
assumptions used in the preparation of such pro forma financial statements
and other pro forma financial information (including the notes thereto) are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions or circumstances referred to therein. The adjusted pro
forma financial statements and other adjusted pro forma financial
information (including the notes thereto) included or incorporated by
reference in the Registration Statement and in the Prospectus (i) present
fairly the information shown therein and (ii) have been properly compiled
on the basis described therein and the assumptions used in the preparation
of such adjusted pro forma financial statements and other adjusted pro
forma financial information (including the notes thereto) are reasonable
and the adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(v) The accountants who have certified the financial statements of the
Company and its subsidiaries and, to the Actual Knowledge of the Company,
of the Operator and its subsidiaries and of GPI and its subsidiaries,
included or incorporated by reference in the Registration Statement and in
the Prospectus are independent certified accountants as required by the
1933 Act. The statements included in or incorporated by reference in the
Registration Statement and in the Prospectus with respect to such
accountants pursuant to Rule 509 of Regulation S-K under the 1933 Act are
true and correct in all material respects.
(vi) The Indenture has been duly qualified under the 1939 Act and has
been duly authorized, executed and delivered by the Company and is a valid
and binding agreement of the Company enforceable in accordance with its
terms, except as limited by (a) the effect of bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws
relating to or affecting the rights or remedies of creditors or (b) the
effect of general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law.)
(vii) The Securities have been authorized by all necessary trust
action and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered and paid for pursuant to this
Agreement, will be valid and binding obligations of the Company enforceable
in accordance with their terms, except as limited by (a) the effect of
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other similar laws
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relating to or affecting the rights or remedies of creditors or (b) the
effect of general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law.)
(viii) The Securities and the Indenture conform to the descriptions
thereof in the Registration Statement and in the Prospectus.
(ix) Since the respective dates as of which information is given in
the Prospectus, and except as otherwise disclosed therein, (i) there has
been no material adverse change in the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the Company
and its subsidiaries, taken as a whole, or, to the Actual Knowledge of the
Company or the Advisor (as defined in paragraph (xii) of this Section
1(a)), in any case whether or not arising in the ordinary course of
business, (ii) there have been no material transactions entered into by the
Company and its subsidiaries, on a consolidated basis, or, to the Actual
Knowledge of the Company, by the Advisor, other than transactions in the
ordinary course of business, (iii) neither the Company nor its subsidiaries
nor, to the Actual Knowledge of the Company, the Advisor, has incurred any
material liabilities or obligations, direct or contingent, (iv) the Company
and its subsidiaries, on a consolidated basis, have not (A) other than the
declaration by the Board of Trustees on July 2, 1997 of a dividend of $0.36
per share of beneficial interest to shareholders of record on July 25,
1997, payable August 22, 1997, declared, paid or made a dividend or
distribution of any kind on any class of its shares of beneficial interest
(other than dividends or distributions from wholly owned subsidiaries to
the Company), (B) other than the issuance of 9,500 common shares of
beneficial interest pursuant to its 1992 Incentive Share Award Plan
authorized by the Company's Board of Trustees on July 2, 1997, issued any
shares of beneficial interest of the Company or any of its subsidiaries or
any options, warrants, convertible securities or other rights to purchase
the shares of beneficial interest of the Company or any of its subsidiaries
(other than the issuance of common shares of beneficial interest upon
conversion of certain convertible debentures of the Company) or (C)
repurchased or redeemed shares of beneficial interest, and (v) there has
not been (A) any material decrease in the Company's net worth or (B) any
material increase in the short-term or long-term debt (including
capitalized lease obligations) of the Company and its subsidiaries, on a
consolidated basis.
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(x) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences.
(xi) Except as otherwise disclosed in the Prospectus, neither the
Company nor any of its subsidiaries nor, to the Actual Knowledge of the
Company, the Advisor, is in violation of its respective charter or by-laws
or other organizational documents or in default in the performance of any
obligation, agreement or condition contained in any bond, debenture, note
or any other evidence of indebtedness or in any other agreement, indenture
or instrument to which the Company or any of its subsidiaries or, to the
Actual Knowledge of the Company, the Advisor, is a party or by which any of
their respective properties or assets may be bound or affected, except for
any such violation that would not have a material adverse effect on the
condition, financial or otherwise or in the respective earnings, business
affairs or business prospects of the Company and its subsidiaries, taken as
a whole, or of the Advisor, as the case may be. Neither the Company nor, to
the Actual Knowledge of the Company, the Advisor, is in violation of any
law, ordinance, governmental rule or regulation or court decree to which it
is subject, except for any such violations that would not, individually or
in the aggregate, have a material adverse effect on the business,
operations, earnings, prospects, properties or condition (financial or
otherwise) of any of the Company and its subsidiaries, taken as a whole, or
the Advisor, as the case may be.
(xii) Except as disclosed in the Registration Statement or in the
Prospectus, there is not now pending or, to the knowledge of the Company,
threatened, any litigation, action, suit or proceeding to which the Company
or, to the actual knowledge of the Company (including without limitation,
for purposes of this Agreement, its managing trustees) without independent
inquiry (the "Actual Knowledge of the Company"), HRPT Advisors, Inc. (the
"Advisor"), is or will be a party before or by any court or governmental
agency or body, which (A) might result in any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of
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the Company or, to the Actual Knowledge of the Company, of the Advisor, or
(B) might materially and adversely affect the property or assets of the
Company or, to the Actual Knowledge of the Company, of the Advisor, or (C)
concerns the Company or, to the Actual Knowledge of the Company, the
Advisor, and is required to be disclosed in the Prospectus, or (D) could
adversely affect the consummation of this Agreement and the issuance,
purchase and sale of the Securities. No contract or other document is
required to be described in the Registration Statement or in the Prospectus
or to be filed as an exhibit to the Registration Statement that is not
described therein or filed as required.
(xiii) The execution, delivery and performance by the Company of this
Agreement, the issuance, offering and sale by the Company of the Securities
as contemplated by the Registration Statement and by the Prospectus and the
consummation of the transactions contemplated hereby and compliance with
the terms and provisions hereof, will not violate or conflict with or
constitute a breach of any of the terms or provisions of, or a default
under, (i) the Amended and Restated Declaration of Trust (the "Declaration
of Trust") or the By-laws of the Company or the charter or by-laws or other
organizational documents of any subsidiaries of the Company or, to the
Actual Knowledge of the Company, the respective charter or by-laws or other
organizational documents of the Advisor, or (ii) except as disclosed in the
Prospectus, any agreement, indenture or other instrument to which the
Company or any of its subsidiaries or, to the Actual Knowledge of the
Company, the Advisor, is a party or by which the Company or any of its
subsidiaries or, to the Actual Knowledge of the Company, the Advisor or
their respective properties or assets is bound, or (iii) any laws,
administrative regulations or rulings or decrees to which the Company or
any of its subsidiaries or, to the Actual Knowledge of the Company, the
Advisor or their respective properties or assets may be subject.
(xiv) No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court or any
public, governmental or regulatory agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their respective
properties or assets is required for the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby, including, without limitation, the issuance, sale and
delivery of the Securities pursuant to this Agreement, except such as have
been obtained and such as may be required under foreign and state
securities or "Blue Sky" laws.
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(xv) Except as otherwise disclosed in the Registration Statement and
in the Prospectus, the Company and each of its subsidiaries has good and
marketable title or ground leases, free and clear of all liens, claims,
encumbrances and restrictions, except liens for taxes not yet due and
payable and other liens and encumbrances which do not, either individually
or in the aggregate, materially and adversely affect the current use or
value thereof, to all property and assets described in the Registration
Statement and in the Prospectus as being owned by them. Except as otherwise
set forth in the Registration Statement or in the Prospectus, all leases to
which the Company and each of its subsidiaries is a party relating to real
property, and all other leases which are material to the business of the
Company and its subsidiaries, taken as a whole, are valid and binding, and
no default (to the Company's knowledge, in the case of leases to which the
Company is a party as lessor, that would, individually or in the aggregate,
have a material adverse effect on the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the Company
and its subsidiaries, taken as a whole) has occurred and is continuing
thereunder, and the Company and each of its subsidiaries enjoys peaceful
and undisturbed possession under all such leases to which it is a party as
lessee. With respect to all properties owned or leased by the Company and
each of its subsidiaries, the Company or such subsidiary has such
documents, instruments, certificates, opinions and assurances, including
without limitation, fee, leasehold owners or mortgage title insurance
policies (disclosing no encumbrances or title exceptions which are material
to the Company and its subsidiaries considered as a whole, except as
otherwise set forth in the Registration Statement and in the Prospectus),
legal opinions and property insurance policies in each case in form and
substance as are usual and customary in transactions involving the purchase
of similar real estate and are appropriate for the Company or such
subsidiary to have obtained.
(xvi) The Company and each of its subsidiaries owns, or possesses
adequate rights to use, all patents, trademarks, trade names, service
marks, copyrights, licenses and other rights necessary for the conduct of
their respective businesses as described in the Registration Statement and
in the Prospectus, and neither the Company nor any of its subsidiaries has
received any notice of conflict with, or infringement of, the asserted
rights of others with respect to any such patents, trademarks, trade names,
service marks, copyrights, licenses and other such rights (other than
conflicts or infringements that, if proven, would not have a material
adverse effect on the business,
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operations, earnings, prospects, properties or condition (financial or
otherwise) of the Company and its subsidiaries, taken as a whole), and
neither the Company nor any of its subsidiaries knows of any basis
therefor.
(xvii) All material tax returns required to be filed by the Company
and each of its subsidiaries in any jurisdiction have been timely filed,
other than those filings being contested in good faith, and all material
taxes, including withholding taxes, penalties and interest, assessments,
fees and other charges due pursuant to such returns or pursuant to any
assessment received by the Company or any of its subsidiaries have been
paid, other than those being contested in good faith and for which adequate
reserves have been provided.
(xviii) Except for non-compliance which in the aggregate does not have
a material adverse effect on the business, operations, earnings, prospects,
properties or condition (financial or otherwise) of the Company and its
subsidiaries, and except for Hazardous Materials (as defined below) or
substances which are handled and/or disposed of in compliance with all
applicable federal, state and local requirements, to the Company's
knowledge, after due investigation, the real property owned, leased or
otherwise utilized by the Company and each of its subsidiaries in
connection with the operation of their respective businesses, including,
without limitation, any subsurface soils and ground water (the "Realty"),
is free of contamination from any Hazardous Materials. To the Company's
knowledge, after due investigation, the Realty does not contain any
underground storage or treatment tanks, active or abandoned water, gas or
oil xxxxx, or any other underground improvements or structures, other than
the foundations, footings, or other supports for the improvements located
thereon which, based on present knowledge, could presently or at any time
in the future cause a material detriment to or materially impair the
beneficial use thereof by the Company or constitute or cause a significant
health, safety or other environmental hazard to occupants or users thereof
without regard to any special conditions of such occupants or users. The
Company represents that, after due investigation, it has no knowledge of
any material violation, with respect to the Realty, of any Environmental
Law, or of any material liability on the part of the Company with respect
to the Realty, resulting from the presence, use, release, threatened
release, emission, disposal, pumping, discharge, generation or processing
of any Hazardous Materials. As used herein, "Environmental Law" means any
federal, state or local statute, regulation, judgment, order or
authorization
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relating to emissions, discharges, releases or threatened releases of
Hazardous Materials into ambient air, surface water, ground water, publicly
owned treatment works, septic systems or land, or otherwise relating to the
pollution or protection of health or the environment, and "Hazardous
Materials" means any substance, material or waste which is regulated by any
federal, state or local government or quasi-government authority, and
includes, without limitation, (a) any substance, material or waste defined,
used or listed as a "hazardous waste", "hazardous substance", "toxic
substance", "medical waste", "infectious waste" or other similar terms as
defined or used in any Environmental Law, as such Environmental Law may
from time to time be amended; and (b) any petroleum products, asbestos,
lead-based paint, polychlorinated biphenyls, flammable explosives or
radioactive materials.
(xix) Each of the Company, its subsidiaries and, to the Actual
Knowledge of the Company, the Advisor, has such permits, licenses,
franchises and authorizations of governmental or regulatory authorities
(together, "permits"), including, without limitation, under any applicable
Environmental Law, as are necessary to own, lease and operate its
properties and to engage in the business currently conducted by it, except
such licenses and permits as to which the failure to own or possess will
not in the aggregate have a material adverse effect on the business,
operations, earnings, prospects, properties or condition (financial or
otherwise) of the Company, or, to the Actual Knowledge of the Company, the
Advisor, and neither the Company nor, to the Actual Knowledge of the
Company, the Advisor, has any reason to believe that any governmental body
or agency is considering limiting, suspending or revoking any such license,
certificate, permit, authorization, approval, franchise or right; each of
the Company, its subsidiaries and, to the Actual Knowledge of the Company,
the Advisor, has fulfilled and performed all of its obligations with
respect to such permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder of any
such permit; and, except as described in the Registration Statement and in
the Prospectus, such permits contain no restrictions that are materially
burdensome to the Company, any of its subsidiaries or, to the Actual
Knowledge of the Company, the Advisor.
(xx) To the knowledge of the Company, no labor problem exists or is
imminent with employees of the Company or any of its subsidiaries that
could have a material adverse effect on the business, operations, earnings,
prospects,
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properties or condition (financial or otherwise) of the Company and its
subsidiaries, taken as a whole.
(xxi) Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any officer, trustee or director purporting to
act on behalf of the Company or any of its subsidiaries, has at any time:
(i) made any contributions to any candidate for political office, or failed
to disclose fully any such contributions, in violation of law; (ii) made
any payment of funds to, or received or retained any funds from, any state,
federal or foreign governmental officer or official, or other person
charged with similar public or quasi-public duties, other than payments
required or allowed by applicable law; or (iii) engaged in any
transactions, maintained any bank account or used any corporate funds
except for transactions, bank accounts and funds, which have been and are
reflected in the normally maintained books and records of the Company and
its subsidiaries.
(xxii) The authorized, issued and outstanding capital stock of the
Company is as set forth under the caption "Capitalization" in the
Prospectus. All of the issued and outstanding indebtedness of the Company
and common shares of beneficial interest are duly and validly authorized
and issued, and all of the issued and outstanding common shares of
beneficial interest are fully paid and nonassessable.
(xxiii) All of the outstanding shares of beneficial interest of, or
other ownership interests in, each of the Company's subsidiaries have been
duly authorized and validly issued and are fully paid and nonassessable,
and, except as disclosed in the Registration Statement and in the
Prospectus, are or will be owned by the Company free and clear of any
security interest, claim, lien, encumbrance or adverse interest of any
nature.
(xxiv) None of the subsidiaries of the Company owns any shares of
stock or any other securities of any corporation or has any equity interest
in any firm, partnership, association or other entity other than the issued
capital shares of its subsidiaries or as referred to or described in the
Registration Statement and in the Prospectus and the Company does not own,
directly or indirectly, any shares of stock or any other securities of any
corporation or have any equity interest in any firm, partnership,
association or other entity other than the issued capital stock of its
subsidiaries, except in each case for non-controlling positions acquired in
the ordinary course of business.
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(xxv) Except as disclosed in the Registration Statement and in the
Prospectus, there are no material outstanding loans or advances or material
guarantees of indebtedness by the Company or any of its subsidiaries to or
for the benefit of any of the officers, trustees or directors of the
Company or any of its subsidiaries or any of the members of the families of
any of them.
(xxvi) The Company and each of its subsidiaries maintains insurance,
duly in force, with insurers of recognized financial responsibility; such
insurance insures against such losses and risks as are adequate in
accordance with customary industry practice to protect the Company and its
subsidiaries and their respective businesses; and neither the Company nor
any such subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely
affect the business, operations, earnings, prospects, properties or
condition (financial or otherwise) of the Company and its subsidiaries,
taken as a whole, except as disclosed in or contemplated by the
Registration Statement and by the Prospectus.
(xxvii) Neither the Company nor any of its officers and directors (as
defined in the 1933 Act Regulations) has taken or will take, directly or
indirectly, prior to the termination of the offering contemplated by this
Agreement, any action designed to stabilize or manipulate the price of any
security of the Company, or which has caused or resulted in, or which might
in the future reasonably be expected to cause or result in, stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(xxviii) Neither the Company nor any of its subsidiaries is an
"investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940 Act"),
or an "investment adviser" as such term is defined in the Investment
Advisers Act of 1940, as amended.
(xxix) The Company is organized in conformity with the requirements
for qualification, and, as of the date hereof the Company operates, and as
of Closing Time the Company will operate, in a manner that qualifies the
Company as a "real estate investment trust" under the Internal Revenue Code
of 1986, as amended (the "Code"), and the rules and regulations thereunder,
for 1996 and subsequent years. The
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Company qualified as a real estate investment trust under the Code for each
of its taxable years from 1987 through 1996.
(xxx) No default exists, and no event has occurred which, with notice
or lapse of time or both, would constitute a default in the due performance
and observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or any of their respective properties is bound
or may be affected, except such defaults which, singly or in the aggregate,
would not have a material adverse effect on the business, operations,
earnings, prospects, properties or condition (financial or otherwise) of
the Company and its subsidiaries, considered as a whole, except as
disclosed in the Registration Statement and in the Prospectus.
(xxxi) The Advisory Agreement, dated as of November 20, 1986, as
amended, between the Company and the Advisor (the "Advisory Agreement"),
has been duly authorized, executed and delivered by the parties thereto and
constitutes the valid agreement of the parties thereto, enforceable in
accordance with its terms, except as limited by (a) the effect of
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other similar laws relating to or affecting the rights or remedies of
creditors or (b) the effect of general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
(b) Any certificate signed by any officer of the Company and delivered to
you or to your counsel shall be deemed a representation and warranty by the
Company to you as to the matters covered thereby.
Section 2. Sale and Delivery to You; Closing.
(a) On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees to sell
to you, and you agree to purchase from the Company, at the purchase price set
forth in Schedule I hereto, the aggregate principal amount of Securities set
forth in Schedule I hereto, plus accrued interest, if any, from the date
specified in Schedule I hereto to the date of payment and delivery.
(b) Payment of the purchase price for and delivery of the Securities shall
be made on the date and at the time and place set forth in Schedule I hereto
(such time and date of payment and
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delivery being herein called "Closing Time"). Payment shall be made by certified
or official bank check or checks in Federal or similar same-day funds payable to
the order of the Company against delivery to you of the Securities to be
purchased by you. The Securities shall be in such authorized denominations and
registered in such names as you may request in writing at least two business
days before Closing Time. The Securities will be made available for examination
and packaging by you not later than 10:00 a.m. on the last business day prior to
Closing Time.
Section 3. Covenants of the Company. The Company covenants with you as
follows:
(a) Immediately following the execution of this Agreement, the Company will
prepare a Prospectus Supplement setting forth the aggregate principal amount of
Securities covered thereby and their terms not otherwise specified in the
Prospectus or the Indenture, your name, the price at which the Securities are to
be purchased by you from the Company, the initial public offering price, if any,
the selling concession and reallowance, if any, and any delayed delivery
arrangements, and such other information as you and the Company deem appropriate
in connection with the offering of the Securities; and the Company will promptly
transmit copies of the Prospectus Supplement to the Commission for filing
pursuant to Rule 424(b) of the 1933 Act Regulations and will furnish to you as
many copies of the Prospectus (including such Prospectus Supplement) as you
shall reasonably request.
(b) Until the termination of the initial offering of the Securities, the
Company will notify you immediately, and confirm the notice in writing, (i) of
the effectiveness of any amendment to the Registration Statement, (ii) of the
transmittal to the Commission for filing of any supplement or amendment to the
Prospectus or any document to be filed pursuant to the 1934 Act, (iii) of the
receipt of any comments from the Commission with respect to the Securities, (iv)
of any request by the Commission for any amendment to the Registration Statement
or any amendment or supplement to the Prospectus with respect to the Securities
or for additional information relating thereto, and (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose. The Company
will make every reasonable effort to prevent the issuance of any such stop order
and, if any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(c) The Company will give you notice of its intention to file or prepare
any post-effective amendment to the Registration Statement or any amendment or
supplement (including any document to be filed pursuant to the 1934 Act prior to
the termination of
14
the initial offering of the Securities) to the Prospectus (including any revised
prospectus which the Company proposes for use by you in connection with the
offering of the Securities which differs from the prospectus on file at the
Commission at the time that the Registration Statement becomes effective,
whether or not such revised prospectus is required to be filed pursuant to Rule
424(b) of the 1933 Act Regulations), will furnish you with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which your counsel shall reasonably
object.
(d) The Company will deliver to you a conformed copy of the Registration
Statement as originally filed and of each amendment thereto filed prior to the
termination of the initial offering of the Securities (including exhibits filed
therewith or incorporated by reference therein and the documents incorporated by
reference into the Prospectus pursuant to Item 12 of Form S-3).
(e) The Company will furnish to you, from time to time during the period
when the Prospectus is required to be delivered under the 1933 Act or the 1934
Act, such number of copies of the Prospectus (as amended or supplemented) as you
may reasonably request for the purposes contemplated by the 1933 Act, the 1933
Act Regulations, the 1934 Act or 1934 Act Regulations.
(f) If any event shall occur as a result of which it is necessary, in the
opinion of your counsel, to amend or supplement the Prospectus in order to make
the Prospectus not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, the Company will either (i) forthwith
prepare and furnish to you a reasonable number of copies of an amendment of or
supplement to the Prospectus or (ii) make an appropriate filing pursuant to
Section 13, 14 or 15 of the 1934 Act, in form and substance reasonably
satisfactory to your counsel, which will amend or supplement the Prospectus so
that it will not include an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances existing at the time it is delivered to a purchaser, not
misleading.
(g) The Company will endeavor in good faith, in cooperation with you, to
qualify the Securities for offering and sale under the applicable securities
laws and real estate syndication laws of such states and other jurisdictions of
the United States as you may designate provided that, in connection therewith,
the Company shall not be required to qualify as a foreign corporation or trust
or to file any general consent to service of process. In each jurisdiction in
which the Securities have been so
15
qualified the Company will file such statements and reports as may be required
by the laws of such jurisdiction to continue such qualification in effect for so
long as required for the distribution of the Securities.
(h) The Company will make generally available to its security holders as
soon as reasonably practicable, but not later than 90 days after the close of
the period covered thereby, an earning statement of the Company (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations) covering
a period of at least twelve months beginning not later than the first day of the
Company's fiscal quarter next following the effective date of the Registration
Statement. "Earning statement", "make generally available" and "effective date"
will have the meanings contained in Rule 158 of the 1933 Act Regulations.
(i) The Company will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Prospectus under the caption "Use
of Proceeds" in all material respects.
(j) The Company currently intends to continue to elect to qualify as a
"real estate investment trust" under the Code, and use its best efforts to
continue to meet the requirements to qualify as a "real estate investment
trust".
(k) The Company will timely file any document which it is required to file
pursuant to the 1934 Act prior to the termination of the offering of the
Securities.
(l) The Company will not, between the date of this Agreement and the
termination of any trading restrictions or Closing Time, whichever is later,
with respect to the Securities, without your prior written consent, offer or
sell, grant any option for the sale of, or enter into any agreement to sell, any
debt securities of the Company with a maturity of more than one year (other than
the Securities which are to be sold pursuant to this Agreement and additional or
expanded commitments to participate in the Company's revolving line of credit)
except as may otherwise be provided in this Agreement.
Section 4. Payment of Expenses. The Company will pay all expenses incident
to the performance of its obligations under this Agreement, including (i) the
printing and filing of the Registration Statement as originally filed and of
each amendment thereto, (ii) the printing and filing of this Agreement, (iii)
the preparation, issuance and delivery of the Securities to you, (iv) the fees
and disbursements of counsel for the Company, referred to in Section 5(b)
hereof, the Company's accountants, the Trustee and its counsel and any
applicable calculation agent
16
or exchange rate agent, (v) the qualification of the Securities under securities
laws and real estate syndication laws in accordance with the provisions of
Section 3(g) hereof, including filing fees and the fee and disbursements of
counsel for the Company in connection therewith and in connection with the
preparation of the Blue Sky Survey, (vi) the printing and delivery to you of
copies of the Registration Statement as originally filed and of each amendment
thereto, and of the Prospectus and any amendments or supplements thereto, (vii)
the printing and delivery to you of copies of the Indenture, (viii) any fees
charged by nationally recognized statistical rating organizations for the rating
of the Securities, (ix) the cost of printing or reproducing and delivering to
you copies of the Blue Sky Survey, (x) the cost of providing any CUSIP or other
identification numbers for the Securities, and (xi) the fees and expenses of any
depositary in connection with the Securities.
If this Agreement is terminated by you in accordance with the provisions of
Section 5 or Section 9(a)(i), the Company shall reimburse you for all of your
out-of-pocket expenses, including the reasonable fees and disbursements of your
counsel.
Section 5. Conditions of Your Obligations. Your obligations hereunder are
subject to the accuracy of the representations and warranties of the Company
herein contained, to the performance by the Company of its obligations
hereunder, and to the following further conditions:
(a) At Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission. The price of the Securities
and any other information previously omitted from the effective Registration
Statement pursuant to Rule 415 of the 1933 Act Regulations shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of the 1933 Act
Regulations within the prescribed time period, and prior to Closing Time the
Company shall have provided evidence satisfactory to you of such timely filing,
or a post-effective amendment providing such information shall have been filed
and declared effective in accordance with the requirements of the 1933 Act
Regulations.
(b) At Closing Time you shall have received:
(1) The favorable opinion, dated as of Closing Time, of Xxxxxxxx &
Worcester LLP, counsel for the Company, in form and substance satisfactory
to your counsel, to the effect that:
(i) The company is a Maryland real estate investment trust duly
organized, validly existing and in good standing under the laws of the
State of Maryland; each of its Significant Subsidiaries (as defined in Rule
1-02 of Regulation S-X under the 1933 Act) has been duly organized, is
validly existing as a corporation or trust in good standing
17
under the laws of its jurisdiction of incorporation or organization; each
of the Company and its subsidiaries has the trust or corporate (as
applicable) power and authority to carry on its business as described in
the Registration Statement and in the Prospectus and to own, lease and
operate its properties; each of the Company and its subsidiaries is duly
qualified and is in good standing as a foreign corporation or trust, as the
case may be, authorized to do business in each jurisdiction in which its
ownership or leasing of property requires such qualification, except where
the failure to be so qualified would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(ii) All of the issued and outstanding shares of beneficial interest
of, or other ownership interests in, each of the Company's subsidiaries
have been duly authorized and validly issued and are fully paid and
non-assessable, and are owned by the Company free and clear of any security
interest or other adverse interest (within the meaning of Article 8 of the
Massachusetts Uniform Commercial Code).
(iii) The Registration Statement has become effective under the 1933
Act, and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the
Commission; and any required filing of the Prospectus pursuant to Rule 424
under the 1933 Act has been made in accordance with said Rule 424.
(iv) The Company has the requisite trust power and authority to enter
into and perform this Agreement and the Indenture and to issue and deliver
the Securities.
(v) To such counsel's knowledge, except as disclosed in the
Registration Statement or in the Prospectus, there is not now pending or
threatened, any litigation, action, suit ox proceeding to which the company
or any of its subsidiaries or the Advisor is or will be a party before or
by any court or governmental agency or body, which (A) might result in any
material adverse change in the condition, financial or otherwise, or in the
business, operations, earnings, prospects, properties or condition
(financial or otherwise) of the Company and its
18
subsidiaries, taken as a whole, or the Advisor or (B) might materially and
adversely affect the property or assets of the Company and its
subsidiaries, taken as a whole, or the Advisor, or (C) concerns the Company
or any of its subsidiaries or the Advisor and is required to be disclosed
in the Prospectus, or (D) could adversely affect the consummation of this
Agreement and the issuance of the Securities; to such counsel's knowledge,
no contract or other document is required to be described in the
Registration Statement or in the Prospectus or to be filed as an exhibit to
the Registration Statement that is not described therein or filed as
required.
(vi) Except as otherwise disclosed in the Prospectus, to such
counsel's knowledge, neither the Company, any of its subsidiaries nor the
Advisor is in violation of its respective charter or by-laws or other
organizational documents or in default in the performance of any
obligation, agreement or condition contained in any bond, debenture, note
or any other evidence of indebtedness or in any other material agreement,
indenture or instrument to which the Company, any of its subsidiaries or
the Advisor is a party or by which any of their respective properties or
assets may be bound or affected, except for any such violation that would
not have a material adverse effect on the business, operations, earnings,
business prospects, properties or condition (financial or otherwise) of the
Company and its subsidiaries taken as a whole, or the Advisor, as the case
may be.
(vii) To such counsel's knowledge, each of the Company, its
subsidiaries and the Advisor has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities (together,
"permits"), including, without limitation, under any applicable
Environmental Law, as are necessary to own, lease and operate its
properties and to engage in the business currently conducted by it, except
such licenses and permits as to which the failure to own or possess will
not in the aggregate have a material adverse effect on the business,
operations, earnings, business prospects, properties or condition
(financial or otherwise) of the Company and its subsidiaries, taken as a
whole, or the Advisor, as the case may be.
(viii) The execution, delivery and performance of this Agreement and
the Indenture, and the consummation of the transactions herein and therein
contemplated will not conflict with or constitute a breach or violation of
any of the terms or provision of, or constitute a default under, (A) the
Declaration of Trust or the By-laws of the Company or the charter or
by-laws or other organizational documents of the Advisor or any Significant
Subsidiary of the Company, or (B) except as disclosed in the Prospectus,
any material
19
agreement, indenture or other instrument to which the Company, any of its
Significant Subsidiaries or the Advisor or their respective material
properties or assets is bound, or (C) any laws, administrative regulations
or rulings or decrees known to such counsel to which the Company, any of
its Significant Subsidiaries or the Advisor or their respective material
properties or assets may be subject.
(ix) No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any federal, Massachusetts or
Maryland court or public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its Significant Subsidiaries or the
Advisor or any of their respective material properties or assets is
required for the Company's execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby,
including, without limitation, the issuance, sale and delivery of the
Securities pursuant to this Agreement, except such as have been obtained
and such as may be required under foreign and state securities or "Blue
Sky" laws.
(x) The Advisory Agreement has been duly authorized, executed and
delivered by the parties thereto and constitutes the valid agreement of the
parties thereto, enforceable in accordance with its terms, except (a) as
limited by the effect of bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other similar laws relating to or affecting the
rights or remedies of creditors, (b) as limited by the effect of general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law) and (c) insofar as the enforceability of
the indemnity and contribution provisions contained in such agreement may
be limited by federal or state securities laws and the public policy
underlying such laws.
(xi) The Advisor (A) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and (B) has
the requisite corporate power and authority to conduct its business as
described in the Prospectus and to own and operate its material properties.
(xii) The Company has qualified to be taxed as a real estate
investment trust pursuant to Sections 856-860 of the Code for each of the
fiscal years ended December 31, 1987 through December 31, 1996, and the
Company's current anticipated investments and its current plan of operation
will enable it to continue to meet the requirements for
20
qualification and taxation as a real estate investment trust under the
Code; actual qualification of the Company as a real estate investment
trust, however, will depend upon the Company's continued ability to meet,
and its meeting, through actual annual operating results and distributions,
the various qualification tests imposed under the Code.
(xiii) The Registration Statement and the Prospectus and any
supplements or amendments thereto (except for the financial statements and
the notes thereto and the schedules and other financial and statistical
data included therein, the Excluded Proceedings (as defined in the last
paragraph of this Section 5(b)) and the part of the Registration Statement
that constitutes the Statement of Eligibility (Form T-1) of the Trustee
under the 1939 Act, as to which such counsel need not express any opinion)
comply as to form in all material respects with the requirements of the
1933 Act.
(xiv) Each document incorporated by reference in the Registration
Statement and in the Prospectus (except for the financial statements and
the notes thereto and the schedules and other financial and statistical
data included therein, the Excluded Proceedings (as defined in the last
paragraph of this Section 5(b)) and the part of the Registration Statement
that constitutes the Statement of Eligibility (Form T-1) of the Trustee
under the 1939 Act, as to which such counsel need not express any opinion)
complied as to form when filed with the Commission in all material respects
with the requirements of the 1934 Act.
(xv) The statements (a) in the Prospectus under the captions
"Description of Shares", "Description of Debt Securities", "Redemption;
Business Combinations and Control Share Acquisitions", "Limitation of
Liability; Shareholder Liability" and "Description of Notes", (b) in Item 1
of the Company's Annual Report on Form 10-K under the caption "Regulation
and Reimbursement", (c) in Part B ("Authorization of Additional Common
Shares of Beneficial Interest") of Item 5 of the Company's Current Report
on Form 8-K dated February 17, 1997 and (d) Item 5 of the Company's Current
Report on Form 8-K dated February 13, 1997 (excluding the statements under
the caption "Legal Proceedings"), in each case insofar as they purport to
summarize matters arising under Massachusetts or Maryland law or the
federal law of the United States, or provisions of documents to which the
Company is a party specifically referred to therein, are accurate summaries
of such legal matters or provisions.
21
(xvi) This Agreement and the Indenture have been duly authorized,
executed and delivered by the Company.
(xvii) The Indenture is a valid and binding obligation of the Company
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' rights generally and equitable principles; and the Indenture has
been duly qualified under the 0000 Xxx.
(xviii) The authorized, issued and outstanding capital stock of the
Company is correctly set forth in all material respects in the Prospectus
under the caption "Capitalization".
(xix) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered and paid for in accordance with the terms of this Agreement, will
be valid and binding obligations of the Company enforceable in accordance
with their terms subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights
generally and equitable principles; and the holders of the Securities are
entitled to the benefit of the Indenture.
(xx) The Company is not required to register as an "investment
company" within the meaning of the 1940 Act.
(xxi) To the extent required to be described therein, the Securities
and the Indenture and the rights related thereto conform in all material
respects to the descriptions in the Registration Statement and the
Prospectus.
(xxii) Although counsel has not undertaken, except as otherwise
indicated in their opinion, to determine independently, and does not assume
any responsibility for, the accuracy or completeness of the statements in
the Registration Statement, such counsel has participated in the
preparation of the Registration Statement and the Prospectus, including
review and discussion of the contents thereof (including review and
discussion of the contents of all documents incorporated by reference in
the Registration Statement and the Prospectus), and nothing has come to the
attention of such counsel that has caused them to believe that the
Registration Statement (including the documents incorporated by reference
therein) at the time the Registration Statement became effective, or the
Prospectus, as of its date and as of Closing Time, as the case may be,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or
22
necessary to make the statements therein not misleading or that any
amendment or supplement to the Prospectus, as of its respective date, and
as of Closing Time, as the case may be, contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading (it being understood that such counsel need
express no view with respect to (a) the financial statements and the notes
thereto and the schedules and other financial and statistical data included
or incorporated by reference in the Registration Statement or in the
Prospectus, (b) the matters to be addressed in the opinion of Sherin &
Lodgen LLP, special counsel to the Company, described below, or (c) the
part of the Registration Statement that constitutes the Statement of
Eligibility (Form T-1) of the Trustee under the 1939 Act).
In rendering their opinion as aforesaid, Xxxxxxxx & Worcester LLP may
rely upon an opinion, dated as of Closing Time, of Piper & Marbury L.L.P.
as to matters governed by Maryland law, provided that such reliance is
expressly authorized by such opinion and a copy of such opinion is
delivered to you and is, in form and substance, satisfactory to you and
your counsel. In addition, in rendering such opinion, such counsel may
state that their opinion as to laws of the State of Delaware is limited to
the Delaware General Corporation Law and that their opinion with respect to
the qualification of the Company and its subsidiaries to do business in
jurisdictions other than their respective jurisdictions of organization is
based solely upon certificates to such effect issued by an appropriate
official of the applicable jurisdictions.
The opinion of Piper & Marbury L.L.P. described in the paragraph above
shall be rendered to you at the request of the Company and shall so state
therein.
In addition, you shall have received at Closing Time an opinion
(satisfactory to you and your counsel) of Sherin & Lodgen LLP, special
counsel for the Company, dated as of Closing Time, to the effect that the
proceedings (the "Excluded Proceedings") described in Item 5 of the
Company's Current Report on Form 8-K dated February 13, 1997 under the
caption "Legal Proceedings", in each case insofar as they purport to
summarize legal proceedings are, taken together, fair summaries of such
legal proceedings.
(c) You shall have received at Closing Time an opinion, dated as of
Closing Time, of Xxxxx & Xxxx LLP, your counsel, as to the matters referred
to in clauses (iii),
23
(xiii), (xvi), (xvii), (xix) and (xxii) of the foregoing paragraph (b). In
giving such opinion with respect to the matters covered by clause (xxii),
such counsel may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and the
Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification except as specified.
In rendering their opinion as aforesaid, Xxxxx & Wood LLP may rely
upon an opinion, dated as of Closing Time, of Piper & Marbury L.L P. as to
matters governed by Maryland law, and the opinion of Xxxxxxxx & Worcester
LLP referred to above as to matters governed by Massachusetts law. In
addition, in rendering such opinion, such counsel may state that their
opinion as to laws of the State of Delaware is limited to the Delaware
General Corporation Law.
(d) At Closing Time (i) the Registration Statement and the Prospectus shall
contain all statements which are required to be stated therein in accordance
with the 1933 Act and the 1933 Act Regulations and in all material respects
shall conform to the requirements of the 1933 Act and the 1933 Act Regulations,
and neither the Registration Statement nor the Prospectus shall contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
and no action, suit or proceeding at law or in equity shall be pending or to the
knowledge of the Company threatened against the Company which would be required
to be set forth in the Prospectus other than as set forth therein, (ii) there
shall not have been, since the respective dates as of which information is given
in the Registration Statement and the Prospectus, any material adverse change in
the condition, financial or otherwise, of the Company or in its earnings,
business affairs or business prospects, whether or not arising in the ordinary
course of business from that set forth in the Registration Statement, and (iii)
no proceedings shall be pending or, to the knowledge of the Company, threatened
against the Company before or by any Federal, state or other commission, board
or administrative agency wherein an unfavorable decision, ruling or finding
would materially and adversely affect the business, property, financial
condition or income of the Company other than as set forth in the Prospectus;
and you shall have received, at Closing Time, a certificate of the President and
Chief Operating Officer and the chief financial officer of the Company, dated as
of Closing Time, evidencing compliance with the provisions of this subsection
(c) and stating that the representations and warranties set forth in Section
1(a) hereof are accurate as though expressly made at and as of Closing Time.
24
(e) Concurrently with the execution and delivery of this Agreement, and at
Closing Time prior to payment and delivery of the Securities, Ernst & Young LLP
shall have furnished to you a letter, dated the date of its delivery, addressed
to you and in form and substance satisfactory to you, confirming that they are
independent accountants with respect to the Company as required by the 1933 Act
and the 1933 Act Regulations and with respect to the financial and other
statistical and numerical information contained in the Registration Statement
and the Prospectus or incorporated by reference therein. Each such letter shall
contain information of the type customarily included in accountants' comfort
letters to underwriters.
(f) At Closing Time your counsel shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein
contemplated and related proceedings, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to you and your counsel.
If any condition specified in this Section 5 shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by you by
notice to the Company at any time at or prior to Closing Time, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof.
Section 6. Indemnification. (a) The Company hereby agrees to indemnify and
hold harmless you and each person, if any, who controls you within the meaning
of Section 15 of the 1933 Act as follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or
the omission, or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading:
25
(2) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(3) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the fees and disbursements of your
counsel), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceedings by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under paragraph (1) or (2) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by you
expressly for use in the Registration Statement (or any amendment thereto) or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); and provided, further, that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to your benefit, or the
benefit of any person controlling you, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto and excluding documents incorporated or deemed to be
incorporated by reference therein) was not sent or given by or on behalf of you
to such person asserting any such losses, claims, damages or liabilities at or
prior to the written confirmation of the sale of such Securities to such person,
if required by law so to have been delivered, and if the Prospectus (as so
amended or supplemented) would have cured the defect giving rise to such loss,
claim, damage or expense.
(b) You agree to indemnify and hold harmless the Company, each of the
Company's trustees, each of the Company's officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section 6, as incurred, but only with respect to untrue statements or omissions,
26
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto) or such preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by you expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and you
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by the
Company and you, as incurred; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. Notwithstanding the provisions of this
Section 7, you shall not be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by you and
distributed to the public were offered to the public exceeds the amount of any
damages which you have otherwise been required to pay in respect of such losses,
liabilities, claims, damages and expenses. For purposes of this Section 7, each
person, if any, who controls you within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as you, and each trustee of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act shall have the same rights to contribution as the Company.
Section 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements
27
contained in this Agreement, or contained in certificates of officers of the
Company submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of you or any
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities to you.
Section 9. Termination of Agreement. (a) You may terminate this Agreement,
by notice to the Company, at any time at or prior to Closing Time (i) if there
has been, since the respective dates as of which information is given in the
Registration Statement, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company, whether or not arising in the ordinary course of business, (ii) if
there has occurred any material adverse change in the financial markets in the
United States or any outbreak of hostilities or escalation of existing
hostilities or other calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in your reasonable judgment,
impracticable to market the Securities or enforce contracts for the sale of the
Securities, (iii) if trading in the Company's common shares of beneficial
interest of the Company has been suspended by the Commission, or if trading
generally on either the New York Stock Exchange or the American Stock Exchange
has been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by either of said
exchanges or by order of the Commission or any other governmental authority, or
if a banking moratorium has been declared by Federal or New York authorities, or
(iv) if the rating assigned by any nationally recognized statistical rating
organization to any long-term debt securities of the Company as of the date of
this Agreement shall have been lowered since such date or if any such rating
organization shall have publicly announced that it has placed any long-term debt
securities of the Company on what is commonly termed a "watch list" for possible
downgrading.
(b) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except as
provided in Section 4, and provided further that Sections 6 and 7 hereof shall
survive such termination.
Section 10. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to you shall be
directed to you at Xxxxxxx Xxxxx World Headquarters, North Tower, 26th Floor,
World Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, attention: Tjarda van X.
Xxxxxxx, Director; and notices to the Company shall
28
be directed to it at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention:
Xxxxx X. Xxxxxxx, President.
Section 11. Parties. This Agreement shall inure to the benefit of and be
binding upon you and the Company and your respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than those referred to in Sections 6
and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the parties hereto and thereto and
their respective successors and said controlling persons and officers, trustees
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Securities from you shall
be deemed to be a successor by reason merely of such purchase.
Section 12. Governing Law and Time; Miscellaneous. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed in said State. Specified times
of day refer to New York City time.
THE DECLARATION OF TRUST ESTABLISHING THE COMPANY, DATED OCTOBER 9, 1986, A
COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE "DECLARATION"), IS DULY
ON FILE IN THE OFFICE OF THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF
MARYLAND, PROVIDES THAT THE NAME "HEALTH AND RETIREMENT PROPERTIES TRUST" REFERS
TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT
INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE
OR AGENT OF THE COMPANY SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR
SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE COMPANY. ALL PERSONS
DEALING WITH THE COMPANY, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF THE
COMPANY FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
29
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument
along with all counterparts will become a binding agreement between you and the
Company in accordance with its terms.
Very truly yours,
HEALTH AND RETIREMENT PROPERTIES TRUST
By /s/ Xxxx Xxxxx
--------------------------
Name: Xxxx Xxxxx
Title: Treasurer
CONFIRMED AND ACCEPTED, as of
the date first above written:
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By /s/ Xxxxxxxxx Xxxx Xxxxx
-------------------------------
Name: Xxxxxxxxx Xxxx Xxxxx
Title: Vice President
30
SCHEDULE I
Company: Health and Retirement Properties Trust
Underwriter: Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx")
Purchase Agreement Dated: July 2, 1997
Registration Statement No.: 333-26887
Indenture: Indenture dated as of July 9, 1997 and
Supplemental Indenture dated as of July 9,
1997, both between the Company and the
Trustee
Trustee: State Street Bank and Trust Company
Title of Securities: Remarketed Reset Notes due July 9, 0000
(xxx "Xxxxxxxxxx")
Xxxxxxxx: Xxxxxx Xxxxxx Dollars
Aggregate Principal Amount: $200,000,000
Current Ratings: Xxxxx'x Investors Service, Inc.: Baa2;
Standard & Poor's Ratings Services: BBB;
Fitch Investors Service, L.P.: BBB+
Price to Public: 100% of the principal amount of the
Securities
Purchase Price: 99.65% of the principal amount of the
Securities
Gross Spread: 0.35% for the initial Remarketing Period
0.075% per annum for each additional
Remarketing Period
Day Basis: Actual/360 for Floating Rate Mode;
30/360 for Fixed Rate Mode
Form: Global Note
I-1
Maturity: July 9, 2007
Initial Spread Period: The one-year period commencing July 9,
1997 and ending July 9, 1998 during
which the interest rate on the
Securities will be reset quarterly and
will equal LIBOR (as defined) plus 0.45%
Initial Interest Rate: LIBOR (as defined) plus 0.45% until
July 9, 1998
Initial Interest
Payment Dates: Quarterly on October 9, 1997, January 9,
1998, April 9, 1998, and July 9, 1998;
the interest rate on the Securities will
be reset quarterly and will be payable
in arrears until July 9, 1998
Duration/Mode
Determination Date: After the Initial Spread Period, the
character and duration of the interest
rate on the Securities as well as the
redemption type (either Par Redemption,
Premium Redemption or Make-Whole
Redemption) will be agreed to by the
Company and the Remarketing Underwriter
on each applicable Duration/Mode
Determination Date, which is the 15th
calendar date prior to the first date of
each Subsequent Spread Period
Subsequent Spread Period: Determined by agreement between the
Company and the Remarketing Underwriter
on the applicable Duration/Mode
Determination Date. Each Subsequent
Spread Period will last for either one
year, two years, three years, four
years, five years, six years, seven
years, eight years or nine years (or any
integral multiple of six months) but
cannot exceed the maturity date of the
Securities
I-2
Interest Rate During
Subsequent Spread Periods: If the Securities are in the Floating
Rate Mode, interest will equal LIBOR
plus the applicable Spread, as agreed to
by the Company and the Remarketing
Underwriter; if the Securities are in
the Fixed Rate Mode, interest will equal
the applicable Spread plus the
comparable Treasury rate
Subsequent Spread: Determined by agreement between the
Remarketing Underwriter and the Company
to result in a rate which will enable
100% of tendered Securities to be
remarketed
Alternate Spread: The percentage equal to LIBOR for the
Quarterly Period beginning on the
Commencement Date of the Subsequent
Spread Period
Redemption: On or after July 9, 1998, the Securities
may be redeemable, in whole or part, at
the option of the Company on those
Interest Payment Dates that are
specified as redemption dates by the
Company on the applicable Duration/Mode
Determination Date; the redemption type
(either Par Redemption, Premium
Redemption or Make-Whole Redemption)
will be agreed to by the Company and the
Remarketing Underwriter on each
applicable Duration/Mode Determination
Date
Sinking Fund Provisions: None
Definitions and Other
Provisions: As per Prospectus Supplement dated
July 2, 1997
Closing Date, Time and
Location: July 9, 1997, 9:00 a.m. at the offices
of Xxxxxxxx & Worcester, LLP in Boston,
Massachusetts
I-3
